Mold-Tek Packaging Ltd. share price target

Mold-Tek Packaging Ltd (MTEP), one of leading manufacturers' and suppliers of high quality airtight and pilfer proof containers/pails in India for Paints, Lubricants, Food and FMCG. Given near term impact on account of lockdown due to spread of...

Mold-Tek Packaging (MTEP) Q3FY20 print was in-line with our estimates. However, on margin front it beat our estimates. Revenue growth at 2% was flat (dragged by lower RM prices) despite 8% volume growth (aided by new plants for Asian Paints 11% vols growth).

Mold-tek packaging Ltd.'s (MPL) Q3FY20 result was marred by overall demand slowdown. Further, decline in raw material prices were passed on to the clients, which dented net sales. Net sales stood at Rs1,007 mn (+2% YoY) driven by 8.2% YoY volume growth. EBITDA came in at Rs187 mn (+10.8% YoY). Softness in raw material prices supported EBITDA margin which expanded by 127bps YoY to 18.6%. The company reported...

MTEP reported lower topline growth primarily due to slowdown in paint industry. Revenues grew 5.0% YoY but de-grew 11.9% QoQ to Rs 1,007m. EBITDA stood at Rs 192m, up 11.2% YoY but lower 8.5% QoQ. Improvement in gross margins by 460bps YoY and 280bps QoQ due to benign crude prices, EBITDAM expanded 110bps YoY and 70bps QoQ to 19.1. EBITDA/kg was Rs 34.3. PAT grew marginally (1.9%) YoY but de-grew 16.2% QoQ to Rs 88m. EPS stood at Rs 3.2. Q3 Paint volumes stood at 2,894 tons up 12.4% YoY (due to additional volumes from Vizag & Mysuru) but de-grew 20.9% sequentially due to slowdown in the...

IML key growth driver: IML volumes/value contribution in Q2FY20 stood at 61%/65% resp. IML's healthy rise in volume/value contribution is led by robust F&F; segment growth of 41%/55% YoY in both volume/value terms. F&F; growth was driven by q-packs for Edible Oil packaging.

Legacy paints division and F&F; segment supports topline growth: Q1FY20 topline growth of 14% was driven by volume growth of 15% wherein IML & Non-IML volume share grew by 61%/39% respectively YoY.

IML revenues as a percentage of sales increased from 61.7% in Q1FY19 to 65% in Q1FY20 and volumes from 53.5% to 61% on back of manifold growth in F&F; business. In spite of sustained growth in F&F; we do not anticipate this mix to change in the near term due to incremental volumes from Vizag and Mysuru. In spite of increase in interest costs estimates we have revised our PAT estimates upwards by 3.8% for FY20E and 21E due to lower tax rate (28% versus 35% previously). We expect Revenue/EBITDA/Adj.PAT to grow at 18.8%/19.0%/20.5% CAGR to Rs 5,563m/Rs 1,018m/ Rs 517m in FY21E on back of 1) sustained growth...

IML revenues as a percentage of sales increased from 61.7% in Q1FY19 to 65% in Q1FY20 and volumes from 53.5% to 61% on back of manifold growth in F&F; business. In spite of sustained growth in F&F; we do not anticipate this mix to change in the near term due to incremental volumes from Vizag and Mysuru. In spite of increase in interest costs estimates we have revised our PAT estimates upwards by 3.8% for FY20E and 21E due to lower tax rate (28% versus 35% previously). We expect Revenue/EBITDA/Adj.PAT to grow at 18.8%/19.0%/20.5% CAGR to Rs 5,563m/Rs 1,018m/ Rs 517m in FY21E on back of 1) sustained growth...

Mold-Tek Packaging Ltd (MTEP), one of the leading manufacturers and suppliers of high quality airtight and pilfer proof containers/pails in India for Paints, Lubricants, Food and FMCG. MTEP's revenue grew by 12% CAGR whereas PAT grew by whopping 41% CAGR over FY13-FY18. EBITDA margin expanded by 830bps to 18.7% over FY13-18. Strong profitability growth was led by margin expansion on account of increasing share of in-mold volumes....

Mold-Tek Packaging (MTEP) in Q3FY19 posted consolidated revenues of Rs. 98.7 Cr. (16% YoY, 2%QoQ) led by mix of volume and pricing growth. Volumes growth was on account of growth in Edible Oil packaging, Food & FMCG (F&F;) and Paints segment. EBITDA during the quarter stood at Rs. 17Cr.